Outsourcing Pharmaceutical Infrastructure Operations

Today's pharmaceutical companies are striving to reduce costs and maximize efficiencies, while simultaneously working to advance the core business as quickly as possible, and must make decisions on the best way to deploy their limited resources. The job of an operations manager for a modern pharmaceutical facility includes operating and maintaining outlying building services and the utilities required to create and sustain on-site manufacturing capabilities, energy management, and essential non-manufacturing services, such as cleaning, building maintenance, catering, and other ancillary services. Outsourcing some or all of these services is a proven solution to optimize efficiency.

Outsourcing rather than out-tasking

David Lyons

In out-tasking, pharmaceutical technology and manufacturing companies utilize third-party vendors to carry out various maintenance tasks on specialized equipment, such as water-for-injection (i.e., stills) or compressors and boilers, while leaving the responsibility for the quality and scope of the work and the internal documentation in the hands of the client. In contrast, when the operations and maintenance program includes regular, preventive, and predictive work, as well as corrective tasks and technical support, then the client is operating under the outsourcing model. In other words, outsourcing involves contracting a whole function, rather than a specific task. Greater savings and efficiencies are found in outsourcing, rather than out-tasking.

Outsourcing energy services

Implementing highly reliable energy solutions at research and manufacturing facilities is a significant challenge for pharmaceutical companies. The traditional model has been to run a facility with the company owning, operating, and maintaining all equipment itself, thus assuming exposure to risk on issues such as equipment durability, fuel volatility, and maintaining the expertise required to keep the system working properly in-house. Pharmaceutical facilities, however, are increasingly embracing the outsourcing model.

The outsourcing service provider can be contracted to operate and maintain complex energy plants and ancillary equipment, such as:

On-site generation and cogeneration assets

Steam, hot-water, and chilled-water systems

Mechanical refrigeration facilities

HVAC systems

Electrical systems

Safety systems

Plumbing/sanitary systems

General building maintenance.

After the outsourced service provider has been selected, the client and service provider should agree on a well-defined scope and clear objectives, which should be captured in a service level agreement (SLA). Using a risk-based approach, the scope and responsibility of the service provider can be built up over time, which will ensure client satisfaction, specifically around regulatory compliance. However, it is important that the client does not relinquish all responsibility, as the ultimate regulatory responsibility lies with the product manufacturer.

Identifying a key subject matter expert to serve as a liaison between the service provider and client will ensure compliance to quality and regulatory systems. The expert should also design escalation and process flows for change controls and equipment deviation, which pose the most risk to the pharmaceutical manufacturer. For the service provider, customer satisfaction and adherence to quality systems in this highly regulated industry are essential.

The client and service provider can develop a performance scorecard that is linked financially to the service agreement contract. Key performance indicators (KPIs) can include areas such as safe systems of work, system availability, and performance against schedule. Each line item can be linked to a performance metric, and each metric can be weighted with agreed-upon scoring criteria that is reviewed and scored on a periodic basis (e.g., monthly, quarterly). Linking the score to contract payments, by withholding an agreed-upon percentage each quarter, drives performance from the service provider's point of view and ensures client satisfaction. As the relationship between the service provider and client evolves, or as business expands, it is common to review and adjust the KPIs.

Outsourcing maintenance allows the client to reduce costs without reducing core-business company headcount and, as the pharmaceutical company becomes the customer of the service provider, to more easily drive change and continuous improvement. Outsourcing also allows management to focus on developing and manufacturing the product rather than on the non-manufacturing activities involved in facilities engineering.